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Public feeling adverse impact of service tax hike, says Syed Saddiq

Publish date: Mon, 04 Mar 2024, 04:20 PM

KUALA LUMPUR: The recent two per cent hike in the service tax will affect not only the wealthy but also the middle and lower-income groups, said Muar member of parliament Syed Saddiq Syed Abdul Rahman.

He criticised the government's justification that the tax increase primarily targets the affluent to benefit the nation.

Following the government's move at the eleventh hour to include service tax on almost all maintenance and repair work, was uncalled for as it would hurt the public.

"Since when did all of this concern only the wealthy? They claim the tax scope increase targets the affluent, but the truth is that ordinary people are feeling the impact.

"What's even more startling is that the government added a new sector to the SST taxation scope just three days before implementing the tax, namely maintenance and repair.

"At the last minute, without a parliamentary presentation and facing opposition due to lack of consultation, it was hastily pushed through with little transparency.

"People are also questioning the broad inclusion of logistics; does it encompass repairs for cars, handphones and other items?"

On Feb 28, the government made an eleventh-hour amendment to include a service tax on almost all maintenance and repair work, which is expected to hurt consumers and medium-sized and small enterprises.

A federal government gazette on an amendment to the service tax regulation published on the Attorney General's Chambers website last Friday stated that service tax would be imposed on almost all maintenance and repair services starting Feb 26.

Datuk Dr Radzi Jidin (PN-Putrajaya) also questioned the rationale behind extending the service tax to cover logistics services.

"Not only is it unclear to the public, but it appears that even the communications minister does not grasp the situation entirely.

"In a poster released by the minister, it was stated that logistics are not subject to SST, yet it's a newly included service scope subjected to a six per cent tax.

"During the presentation of the previous Budget, the finance minister also said they would implement it due to numerous concerns raised, and eventually, it was incorporated.

"What's even more concerning is the possibility of multiple taxes being imposed. So, I would like to inquire about the Finance Ministry's strategy to address this issue."

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